Opinion: Container ships will continue to grow, even after Ever Given gets stuck in the Suez Canal

Today, it is estimated that 90% of the world’s goods are transported by sea, and 60% of them, including virtually all imported fruits, appliances and appliances, are packed in large steel containers. The rest are mainly commodities such as oil or grains that are poured directly into the hull. In all, about $ 14 trillion of the world’s goods spend some time inside a large metal box. In short, without the standardized container, like the thousands that helped keep Ever Given stuck in the mud along the Suez Canal, congesting traffic for nearly a week, the global supply chain on which society depends would not. would exist. Approximately 30% of the world’s container shipping volumes pass through the Suez Canal. The Ever Given incident reveals several problems in the modern supply chain. But, as an expert on the subject, I think it also highlights the importance of simple but essential cargo containers that, from a distance, resemble Lego blocks floating in the sea. using boxes, sacks, barrels and containers of different sizes to transport goods over long distances. The Phoenicians in 1600 a. C. Egypt transported wood, cloth and glass to Arabia in sacks through caravans driven by camels. And hundreds of years later, the Greeks used ancient storage containers known as amphorae to transport wine, olive oil and cereals in triremes that plowed across the Mediterranean and neighboring seas to other ports in the region. Even as trade became more advanced, the process of loading and unloading as goods were transferred from one method of transport to another remained very laborious, time-consuming, and costly, in part because containers came in all forms. and sizes. Containers from a ship being transferred to a smaller rail car, for example, often had to be opened and repacked in a freight car. Different sized packages also meant that the space on a ship could not be used effectively and also created weight and balance challenges for a ship. And goods were more likely to suffer damage from handling or theft due to exposure.A Commercial Revolution The US military began exploring the use of standardized small containers to more efficiently transport weapons, bombs and other material to the front during World War II. But it wasn’t until the 1950s that American businessman Malcolm McLean realized that by standardizing the size of containers used in world trade, the loading and unloading of ships and trains could be at least partially mechanized, thus making transfer from a mode of transport. to another seamless. In this way, the products could remain in their packaging from the point of manufacture to delivery, which translates into reduced costs in terms of labor and possible damage. In 1956, McLean created the standard cargo container, which we basically still use today. He originally built it to a length of 33 feet, which soon increased to 35, and 8 feet wide and tall. This drastically reduced the cost of loading and unloading a ship. In 1956, manual loading of a ship cost $ 5.86 per ton; the standardized container reduced that cost to just 16 cents a ton. It also made it much easier to protect cargo from the elements or pirates, as the container is made of durable steel and remains locked during transport. The United States made great use of this innovation during the Vietnam War to ship supplies to soldiers, who sometimes even used the containers as shelters.

Today, the standard container size is 20 feet long, the same width, but more commonly half a foot taller, a size known as a “20-foot equivalent container unit” or TEU. There are actually a few different “standard” sizes, like 40 feet long or slightly taller, although they are all the same width. One of the key benefits is that whatever the size of a ship, they all, like Lego blocks, fit together perfectly, with virtually no gaps. This innovation made the modern globalized world possible. The amount of containerized freight soared from 102 million metric tons in 1980 to approximately 1.83 billion metric tons in 2017. Most containerized traffic flows through the Pacific Ocean or between Europe and Asia, generally through the Suez Canal. The standardization of container sizes has also led to an increase in ship sizes. The more containers packed on a ship, the more a shipping company can earn on each trip. In fact, the average size of a container ship has doubled in the last 20 years alone. The largest ships sailing today are capable of carrying 24,000 containers, a cargo capacity equivalent to the cargo capacity of a 44-mile long freight train. Put another way, a ship called the Globe with a capacity of 19,100 20-foot containers could carry 156 million pairs of shoes, 300 million tablets, or 900 million cans of baked beans, should you feel hungry. The Ever Given has a similar capacity of 20,000 containers, although it was only carrying 18,300 when it got stuck in the Suez Canal. In terms of cost, imagine this: the typical pre-pandemic price of transporting a 20-foot container from Asia to Europe with more than 20 tons of cargo was roughly the same as that of a budget ticket to fly the same trip. The increasing size of the ships comes at a cost, as the Ever Given situation demonstrated. Shipping has become increasingly important to global trade and supply chains, but it was quite invisible until the recent traffic jam and blockade of the Suez Canal. As the Ever Given traversed the 120-mile narrow channel, strong gusts of wind pushed it ashore and its 200,000 tonnes of weight stuck it in the mud. Approximately 12% of the world’s maritime traffic passes through this channel. The blockade had, at one point, at least 369 trapped ships waiting to pass through the canal from either side, at an estimated cost of $ 9.6 billion per day. That translates to $ 400 million per hour, or $ 6.7 million per minute. Shipbuilding companies continue to work on building ever larger container ships, and there is little evidence that this trend will stop anytime soon. Some forecast that ships capable of carrying loads 50% larger than Ever Given will sail the open sea by 2030. In other words, the standardized shipping container remains more popular – and in demand – than ever. Anna Nagurney is Professor of Operations Management at the John F. Smith Memorial at the University of Massachusetts Amherst. This was first published by The Conversation: “Today’s global economy runs on standardized shipping containers, as illustrated by the Ever Given fiasco.”